Crowley Welcomes Small Business Tax Breaks as Framework for Raising Minimum Wage
Today, US Congressman Joseph Crowley (D-Queens & the Bronx), member of the House Committee on Ways and Means, announced Committee approval of a tax cut aimed at helping small businesses, the lifeblood of the economy of Queens and the Bronx. Congressman Crowley, a co-sponsor of the package, hailed the legislation both as a tool to help entrepreneurs continue to grow and create jobs and as a means for both chambers of Congress to come to an agreement on raising the minimum wage for the lowest paid employees.
"These tax cuts, which would enable small businesses create and keep jobs, will provide the framework for Congress to act soon and raise the minimum wage," said Congressman Crowley. "This bill is responsible legislation that will help ensure our lowest paid workers get a pay raise, while giving a boost to the smaller businesses that provide important job opportunities for millions of Americans. I am pleased my colleagues on Ways and Means approved this critical legislation."
The tax breaks offered in the Small Business Tax Relief Act of 2007, which would provide $2 billion in cuts, include:
Extending and Expanding the Work Opportunity Tax Credit. This extension of the WOTC, which is designed to encourage the creation of permanent jobs, would allow this incentive to continue for small businesses through the end of 2008. The legislation would also expand the WTOC to disabled veterans and create the available credit for wages paid to disabled veterans and increase the age limit from 25 to 40 for residents living in empowerment zones, as well as enterprise and renewal communities, benefiting our returning heroes from overseas as well as residents throughout Queens and the Bronx.
Extending and Increasing Small Businesses Expensing. This one-year extension of would raise the limit on the writeoff of small businesses purchasing new equipment to $125,000 (indexed for inflation from $112,000).
Enhancing the Tip Credit for Certain Small Businesses. This provision would allow businesses to continue claiming the full tip credit despite any increase in the federal minimum wage. Restaurant owners, for example, will receive the same credit when paying Social Security taxes on the tip income in excess of the federal minimum wage rate of their employees, despite any future increases of the minimum wage. This way, small businesses do not suffer from increasing wages, and their workers benefit.
Providing a Waiver of Individual and Corporate Alternative Minimum Tax Limitations on WOTC and Tip Credits. The legislation would provide a permanent waiver of the individual and corporate AMT limitations that prevent many small businesses from claiming the WOTC and the credit for Social Security taxes paid with respect to cash tips.
Simplifying Family Business Tax. In regards to businesses owned by married couples, both spouses would receive credit in paying Social Security and Medicare taxes. Under current law, only the filing spouse receives credit for paying for these taxes.
The tax cuts package, expected to come up before the House of Representatives later this week for an up or down vote, provides the framework for the House and the Senate to come to an agreement on raising the minimum wage. Last month, Congressman Crowley, a long time supporter of raising the minimum wage, voted to pass HR 2, which would increase the minimum wage from $5.15 to $7.25 an hour.
Congressman Crowley stated, "In Queens and the Bronx, Restaurant owners, and other small business owners, including those owned by married couples, will particularly be helped by the tax incentives and credits offered in this package to strengthen employment opportunities their employees."